Progress Energy Announces the Closing of its Strategic Partnership with PETRONAS

Aug 2, 2011

Upstream and LNG joint ventures focus on growing Asian markets

CALGARY, Aug. 2, 2011 /CNW/ – Progress Energy Resources Corp.
(“Progress” or the “Company”) (TSX:PRQ) announced today that it has
closed the previously announced transaction to create a strategic
partnership with the Malaysian national oil and gas company, PETRONAS,
to develop a portion of Progress’ Montney shale assets in the Foothills
of northeast British Columbia (the “Transaction”). Under the
Transaction, PETRONAS acquired 50 percent of Progress’ working interest
in the Altares, Lily and Kahta properties (the “North Montney Joint
Venture”).

“Both parties have worked diligently and cooperatively towards the
completion of the agreements that form the basis of our strategic
partnership,” said Michael Culbert, President and Chief Executive
Officer of Progress. “We will now move forward on building a strong
gas production growth profile from the North Montney Joint Venture
assets as well as initiating the feasibility study for the development
of an LNG export facility on the west coast of British Columbia.”

PETRONAS is paying a total consideration of CDN$1.07 billion of which 25
percent of the total consideration (CDN$267.5million) has been paid in cash upon closing and 75 percent of the total
consideration will be paid in the form of a capital funding commitment
whereby PETRONAS will pay 75 percent of Progress’ share of future
capital expenditures in the North Montney Joint Venture to a total of
CDN$802.5million.

PETRONAS and Progress have also established an LNG export joint venture
(the “LNG Export Joint Venture”) which is 80 percent and 20 percent
owned, respectively. The LNG Export Joint Venture will launch a
feasibility study immediately to evaluate the potential of the LNG
export facility on the west coast of British Columbia. PETRONAS will be
leading the development of the LNG export facility, and PETRONAS and
Progress will jointly market the LNG utilizing PETRONAS’
well-established and extensive network of customers in LNG markets
globally.

In connection with the LNG Export Joint Venture, at the time of a
successful LNG Export investment decision, PETRONAS will provide a
standby equity financing commitment of up to $600 million, for
Progress’ capital requirements of the North Montney Joint Venture to
supply gas for the LNG Export Joint Venture, subject to receipt of all
regulatory approvals.

About PETRONAS
PETRONAS is the national oil and gas company of Malaysia. Incorporated
in 1974, the company, ranked among the most profitable among the
Fortune Global 500 entities, is engaged in the oil, gas and
petrochemicals industries with strategic business assets and interests
in more than 30 countries. It is one of the world’s leading LNG
companies and is fully involved in every value chain of the LNG
business, from natural gas production, liquefaction and shipping to
re-gasification and trading. Apart from its Malaysian production
facility, currently one of the world’s largest, PETRONAS also owns
interests in LNG assets in Australia, Egypt and the United Kingdom.

About Progress Energy
Progress is a Calgary, Canada-based energy company focused on
exploration, development and production of large, unconventional
natural gas resources in northeast British Columbia and northwest
Alberta. Throughout its history, Progress has a solid track record of
growing reserves, production and the underlying value of the Company
for its shareholders. Common shares of Progress are listed on the
Toronto Stock Exchange under the symbol PRQ.

Advisory on Future Oriented Information

This press release (the “press release”) contains forward-looking
statements and forward-looking information within the meaning of
applicable securities laws. The use of any of the words “expect”,
“anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”,
“will”, “project”, “should”, “believe”, “plans”, “intends” and similar
expressions are intended to identify forward-looking information or
statements. In particular, forward looking statements in this press
release include, but are not limited to:

the terms of the North Montney Joint Venture, including terms of the
payment of the remaining 75 percent of the total consideration;

the effect of the North Montney Joint Venture on the Company’s growth
strategy;

the effect of the Transactions on Progress’ development of its
unconventional assets and Montney land holdings;

the terms of LNG Export Joint Venture;

the terms of standby equity financing commitment; and

Progress’ business strategy, priorities and plans.

The forward-looking statements and information are based on certain key
expectations and assumptions made by Progress, including expectations
and assumptions concerning prevailing commodity prices and exchange
rates, applicable credits, royalty rates and tax laws; the performance
of existing wells; the success obtained in drilling new wells; the
sufficiency of budgeted capital expenditures in carrying out planned
activities; completion of definitive documentation; receipt of all
required regulatory approvals; and the availability and cost of labour
and services and future operating costs. Although Progress believes
that the expectations and assumptions on which such forward-looking
statements and information are based are reasonable, undue reliance
should not be placed on the forward looking statements and information
because Progress can give no assurance that they will prove to be
correct.

Since forward-looking statements and information address future events
and conditions, by their very nature they involve inherent risks and
uncertainties. Actual results could differ materially from those
currently anticipated due to a number of factors and risks. These
include, but are not limited to, the risks associated with the oil and
gas industry in general such as operational risks in development,
exploration and production; delays or changes in plans with respect to
exploration or development projects or capital expenditures; the
uncertainty of reserve and resource estimates; the uncertainty of
estimates and projections relating to test rates, reserves, resources,
production, costs and expenses; health, safety and environmental risks;
commodity price and exchange rate fluctuations; marketing and
transportation; loss of markets; environmental risks; competition;
incorrect assessment of the value of acquisitions; failure to realize
the anticipated benefits of acquisitions; ability to access sufficient
capital from internal and external sources; the risk that the LNG
Export Joint Venture is not completed on the terms described or at all;
failure to receive all required regulatory approvals; failure to
realize the anticipated benefits of the Transaction or the LNG Joint
Venture; and changes in legislation, including but not limited to tax
laws, royalties and environmental regulations.

Management has included the above summary of assumptions and risks
related to forward-looking information provided in this press release
in order to provide security holders with a more complete perspective
on the Company’s future operations in respect of the North Montney
Joint Venture and the LNG Export Joint Venture and such information may
not be appropriate for other purposes. The Company’s actual results,
performance or achievement could differ materially from those expressed
in, or implied by, these forward-looking statements and, accordingly,
no assurance can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of them
do so, what benefits that the Company will derive there from. Readers
are cautioned that the foregoing lists of factors are not exhaustive.
Readers are cautioned that the foregoing list of factors is not
exhaustive. Additional information on these and other factors that
could affect the operations or financial results of Progress are
included in reports on file with applicable securities regulatory
authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements and information contained in this
press release are made as of the date hereof and Progress undertakes no
obligation to update publicly or revise any forward-looking statements
or information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws.